Cloud, virtualization, automation and mobility have fundamentally impacted the way businesses operate; yet many IT departments maintain the same roles and organizational structures that they’ve had for the past 15 years. And, for a lot of companies, that’s making IT more of a roadblock than an enabler.
“I think one of the biggest challenges IT organizations operating in the traditional framework are experiencing today is finding a way to compete against the cost and speed at which cloud service providers deliver. Instead of waiting, business units are going outside IT and procurement organizations to get what they need when they need it. Speed to market is critical especially with independent software vendors (ISVs), ” explained Thomas C Gibson, vice president at Unisys. “While the business units gain speed, there’s an inherent risk in not leveraging IT and procurement to fully qualify vendors to ensure their offerings are truly functional and the providers have a sustainable business model.”
So, how can the IT organization regain control?
“Right now, you have a lot of organizations stuck in ‘legacy land’ — so busy keeping the lights on that business units have no choice but to go around them,” said Jonathan Crane, chief commercial officer for IPSoft. “To change that, CIOs have to become resource managers, more closely linked to finance and to the business; more focused on devising the best strategy for procuring what the business units need. They also have to realize that the traditional procurement process has to dramatically change, because business moves too fast today.”
Of course, getting the compute power/infrastructure/applications/fill-in-the-blank, probably from a variety of providers, is only part of the challenge.
The question becomes: who supports the end user and who supports IT? If I source my email to a third-party provider, how much end user support do they supply – and if the answer is ‘not enough,’ where does the IT organization build a bridge to reach into support from that vendor?
These are all questions that Rick Sizemore, director of Alsbridge, believes more companies need to start answering right now.
The Fine Art of Service Orchestration
Although the basic towers within the IT structure — like application, service desk and infrastructure – can exist in the same titular ways, the greatest need is an organization that overlays these towers and orchestrates services between them.
“The concept is similar to Project Management Office (PMO) and Vendor Management Office (VMO) groups that exist today within many traditional organizations, built out into larger and more skilled practices, with higher-level technology architect and business analyst skills than what most organizations currently have,” Sizemore said. “While today, this may be a team or a single role within the CTO’s organization, in the future, it will be a separate function.”
The office of the CTO, or the architecture team, will still set standards and identify the necessary vendor capabilities, but will not manage the actual orchestration.
“Will this be a center of excellence or just an extension of the current organization? In the end, it doesn’t really matter, as long as the new skills are dedicated to their intended role,” Sizemore said.
The Movement From Operational to Consultative
Let’s face it, IT has gone through a painful era, with shrinking budgets in combination with increased operational costs, transforming the once corporate golden child into an organization that spends the bulk of its time in maintenance mode.
“When you’re spending your budget keeping the infrastructure running, you don’t have the means to hire real visionaries – and that has to change,” Crane of IPSoft said. “IT has to transform from operational to strategic – and do it in a major way.”
All of our experts agree, innovation has never been more important to IT organizations, nor has the need to delve deep into what the individual business units really need. In other words, the same kind of customer intimacy that outsourcing providers strive to create with their clients has to also take place between the client company’s internal IT department and the individual business units it serves.
“IT departments need to take a service view of business,” Gibson of Unisys said. “In many cases, that means moving your more experienced IT personnel into the individual business units to understand the needs first-hand, then backfilling those operational positions with resources from your managed services provider. When IT and business come together to solve the real challenges that impact productivity, sales and delivery, that’s when the magic – the real innovation – happens.”
In terms of technical delivery, all of our experts see the need for highly focused specialists within those delivery towers, with the ‘run and maintain’ functions continuing to transition to multiple external providers.
“The skill levels within the towers will deepen as the entry-level and mid-level technical functions are transitioned to outsourcing providers or augmented for surge resources on demand,” Sizemore of Alsbridge said. “There is no reason why a consumption-based model in the technical capability sense wouldn’t transition to human as well as systems delivery.”
The Changing Role of the CIO
Of course, these changes aren’t limited to the rank-and-file of the IT department. The role of the CIO is also morphing from ‘tech guru’ into something new.
“The CIO will become more of a business owner – focusing more on strategy and less on specific technology infrastructure,” Gibson of Unisys said. “Establish partnerships that bring you the capabilities, data analytics and specializations you need without the large capital investments and lengthy implementation timeframes. Make speed a core requirement and data the product with which you manage the business.”
While corporate power today often is measured by number of reports, Crane of IPSoft sees a different scale in the future.
“In the future, I think CIOs will brag about how many virtual engineers they have working for them, diagnosing problems, putting automation in the queue. In my mind, that’s going to be tomorrow’s measure of success,” Crane said.
Although today, most CIOs rise through the ranks from an IT, finance or business operations function; rarely do they rotate through the traditional management growth process. Sizemore of Alsbridge believes tomorrow’s CIO career path will take a different route.
“In the future, the CIO will have to be intimately focused on enabling business differentiation, not technical solutions. As such, he or she will have increased involvement in developing the overall business strategy, on equal footing with product and sales executives; and potentially a successor to the CEO,” Sizemore said. “Although they’ll still need the ability to relate the business with technology, the emerging CIOs are more likely to have a background with the business and not with IT.”
This shift could limit the pool of viable CIO candidates, but also strengthen the positions of both CTO and heads of IT delivery.
“We’re reaching a point where there is no such thing as a technology sector anymore. While there are technology providers, today, every business, no matter what the industry, is a technology-focused business,” he said. “It’s a whole different world.”
You’ve heard from our experts, not tell us what you see from your vantage point. What changes do you see in your IT organizational chart in the coming years?